Stocks weak
“Least loved bull market in modern history.”
The systematic relative strength blog quoting USA Today reminds us that the current bull market is the least loved bull market in modern history. Here you have the details. If we take a contrarian view, this implies that it is still far from topping.
From a Dow Theory perspective, we know that the “buy signal” was given on January 2, 2013 (Schannep’s version) or January 18, 2013 (Classic/Rhea version). We also know that primary bull markets tend to last ca. 1-2 years according to Dow Theory signals. Thus, if the empirical record is to serve us as a guide, the current primary bull market is still “young” and, hence, while nothing is carved in stone, the odds favor the continuance of the primary bull market. However, we should distinguish between a primary bull market and a secondary reaction within a primary bull market. Thus, while it is probable that a secondary reaction may be developing, the youth of the current primary bull market advocates for continuance of the primary bull market.
Stocks
The SPY, Transports and Industrials closed down. The primary and secondary trend remains bullish.
Today’s volume was higher than Thursday’s (last trading day), which makes it a bullish volume day. While the overall patter of volume is bearish, the last two days have witnessed bullish volume.
Gold and silver
Silver made a lower low unconfirmed by GLD which closed up. Lower lows unconfirmed tend to be deceptive. Thus, for the primary bear market in SLV and GLD to be reconfirmed, it is necessary that GLD makes lower lows. Here you have an updated chart of SLV and GLD.
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| New low in silver unconfirmed by gold |
Please mind that the SLV/GLD ratio (purple line) shows that gold is stronger than silver. Normally, healthy bull markets in the precious metals entail strength in silver, which, until now, is clearly absent. So silver is acting like a drag on gold.
According to the Dow Theory, we have to stick to the existing trends until a new signal makes us change our mind. Thus, the primary and secondary trend for SLV and GLD remains bearish.
GDX and SIL, the gold and silver miners ETFs, closed down. The primary and secondary trend remains bearish.
Here you have the figures of the markets I monitor for today:
| Data for April 1, 2013 | |||
| DOW THEORY PRIMARY TREND MONITOR SPY | |||
| SPY | |||
| Bull market started | 11/15/2012 | 135.7 | |
| Bull market signaled | 01/02/2013 | 146.06 | |
| Last close | 04/01/2013 | 156.05 | |
| Current stop level: Bear mkt low | 135.7 | ||
| Unrlzd gain % | Tot advance since start bull mkt | Max Pot Loss % | |
| 6.84% | 15.00% | 7.63% | |
| DOW THEORY PRIMARY TREND MONITOR GOLD (GLD) | |||
| GLD | |||
| Bull market started | 05/16/2012 | 149.46 | |
| Bull market signaled | 08/22/2012 | 160.54 | |
| Exit December 20 | 12/20/2012 | 161.16 | |
| Current stop level: Sec React low | 11/02/2012 | 162.6 | |
| Realized Loss % | Tot advance since start bull mkt | ||
| 0.39% | 7.83% | ||
| DOW THEORY PRIMARY TREND MONITOR SILVER (SLV) | |||
| SLV | |||
| Bull market started | 06/28/2012 | 25.63 | |
| Bull market signaled | 08/22/2012 | 28.92 | |
| Exit December 20 | 12/20/2012 | 29 | |
| Current stop level: Sec React low | 11/02/2012 | 29.95 | |
| Realized gain % | Tot advance since start bull mkt | ||
| 0.28% | 13.15% | ||
| DOW THEORY PRIMARY TREND MONITOR ETF SIL | |||
| SIL | |||
| Bull market started | 07/24/2012 | 17.08 | |
| Bull market signaled | 09/04/2012 | 21.83 | |
| Exit January 23 | 01/24/2013 | 21.69 | |
| Current stop level: Sec React low | 11/15/2012 | 21.87 | |
| Realized Loss % | Tot advance since start bull mkt | Max Pot Loss % | |
| -0.64% | 26.99% | 27.81% | |
| DOW THEORY PRIMARY TREND MONITOR ETF GDX | |||
| GDX | |||
| Bull market started | 05/16/2012 | 39.56 | |
| Bull market signaled | 09/04/2012 | 47.77 | |
| Exit January 23 | 01/24/2013 | 44.56 | |
| Current stop level: Sec React low | 12/05/2012 | 45.35 | |
| Realized Loss % | Tot advance since start bull mkt | Max Pot Loss % | |
| -6.72% | 12.64% | 20.75% | |
Sincerely,
The Dow Theorist.
